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Enron's Scandal: Unacceptable Business Practices and Consequences
This is explaining from Figure 1. In 1996 and 2006 had the biggest business crime in modern history that most individuals today can relate too is the Enron scandal, and the trial that ensued there after. Enron was a electricity and natural gas conglomerate that was established in 1985 that was merged from two different companies (Houston Natural Gas and Omaha's Nebraska Internorth), Kenneth Lay was name CEO of this Houston, TX based company (https://www.youtube.com/watch?v=vY6zEonpEiQ). Enron had great profits and overall was doing well, at one point in time Enron was estimated to be worth $70 billion dollars. Enron created a natural gas pipeline in the U.S., because the company was being so profitable and lucrative in this business. At one point in time Enron was the 7th largest company in the United States, and in 2000 reached $100 billion dollars in profits. Fortune 500 ranked Enron 6th largest company in the energy market, and the highest peak of the stock reached $90 a share (https://www.youtube.com/watch?v=vY6zEonpEiQ). In 2001 fractures emerged when Jefferey Killing was trying to revamp the company, but after 6 months of being CEO of the company, he resigns unexpectedly and Lay stepped back into his old position. At this time Enron reported a $618 million dollar loss, and in which sparked questions on Wall Street and other policing agencies started to investigate Enron for their business practices (https://www.youtube.com/watch?v=vY6zEonpEiQ). Now with this being said Enron's Vice President Sherron Watkins had noticed these financial deficiencies within Enron, she had brought it to Enron's upper management's attention, but they had ignored her findings. Enron replaced Andrew Fastow (Cheif Financial Officer for Enron) and the SEC launched their own investigation on Andrew Fastow's practices within Enron. Which the investigation found the intriget web of how Fastow hid Enron's debts into their subsidiaries, and also how stocks fell .26 cents a share, and that investors lost billions of dollars. Also which led their employees losing all their pensions, stocks, and jobs to name a few (https://www.youtube.com/watch?v=vY6zEonpEiQ0. December 2, 2001 Enron filed for bankruptcy protection and which led to 5,600 Enron employees lost their jobs. The following month the U.S Department of Justice opened its investigation on Lay, and subsequently Lay quit his position as CEO of Enron. Skilling was charged with wire fraud, securities fraud, conspiracy, insider trading and making false statements on financial reports, and he plead not guilty for. Lay was charged with fraud and making misleading statements in July, and he pleaded not guilty (https://www.youtube.com/watch?v=vY6zEonpEiQ). Fastow got a ten year sentence for his part with Enron, and of course he took a plea deal. Other Enron Executive took plea deals to help the prosecutions case against Skelling and Lay. One of the biggest helpers for the prosecution was Sherren Watkins, and she gave all the appropriate help for the prosecution for U.S. Department. Andrew Skilling was sentenced to 168 months in prison, and for Lay he died on July 6, 2006 (https://www.youtube.com/watch?v=vY6zEonpEiQ). Now there were other top executives that had a role in Enron's fall, but these three had the most significant and substantial role in Enron's demise and had changed how we viewed Cooperate responsibility, and how they are and should be held liable for their criminal actions. This is how Barnes-Oxley Act was established, and how companies should be transparent, and held liable for their actions for their financial reports for their investors and employees (https://www.youtube.com/watch?v=vY6zEonpEiQ).